The following is a summary of the WhiteHorse Finance (WHF) Q3 2024 Earnings Call Transcript:
Financial Performance:
WhiteHorse Finance reported a disappointing Q3 2024 with a net investment income of $9.2 million, or $0.394 per share, slightly below the previous quarter.
Net Asset Value (NAV) per share decreased by 5.1% from the prior quarter to $12.77, impacted by net markdowns primarily from specific underperforming investments.
Total investment portfolio decreased in value to $654.3 million compared to $660 million in the previous quarter.
Business Progress:
Gross capital deployments in Q3 2024 were $51 million, with $20.8 million in net deployments after accounting for repayments and sales.
Strategic JV with STRS saw a decrease in leverage and holds an aggregated fair value of $309.8 million in investments.
Expanded focus on non-sponsor market to leverage opportunities with potentially better risk-return profiles due to less competition and aggressive market conditions.
Opportunities:
Focusing on non-sponsor markets where there are better risk-return profiles and much less competition compared to sponsor markets, providing a strategic growth opportunity.
Risks:
The portfolio experienced significant write-downs on specific investments like American Crafts and Honors Holdings, exposing the company to risks of concentrated customer dependencies and industry-specific downturns.
A described excessive leverage in market transactions indicates a competitive lending environment, potentially leading to higher credit risks.
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